Apple supplier Taiwan Semiconductor Manufacturing Co. (TSMC) on Thursday announced record profits in the fourth quarter of 2014 buoyed by its lucrative chip-making deal with Apple for the new iPhones.

In addition, the firm announced migrating to a much finer 10-nanometer process technology this year after being among the first to adopt 20-nanometer chip-making technology in 2014.

According to KGI Securities analyst Ming Chi-Kuo, TSMC would not only pick up 100 percent of orders for Apple’s “A9X” chip, which should be used in an iPad refresh this Fall, but also get to produce an “S2” processor for a second-generation Apple Watch and an “A10” chip that should power a 2016 iPhone model, likely to be called “iPhone 7”.

TSMC reported net profit for the three months ended December 31, 2014 of NT$79.99 billion, or about $2.51 billion, as revenue rose 53 percent from a year earlier to NT$222.52 billion. Earnings for the entire year rose to new high NT$263.90 billion, up 40 percent from NT$188.15 billion in 2013.

More importantly, the company is increasing its capital expenditure in 2015 to as much as $12 billion, up sharply from $9.52 billion last year, as it preps to deliver a prototype 10-nanometer chip design in the fourth quarter of this year.

TSMC Chairman Morris Chang said last year that the company has committed a “blank check” to developing the finer 10-nanometer process technology “in the shortest time possible.”

As for upcoming Apple processors, it’s worth noting TSMC and Samsung split production of the A8/A8X chips for the new iPhones/iPads, with TSMC grabbing about 70 percent of orders. Going forward, the analyst predicts TSMC taking over the majority of orders while Samsung will account for the minority of Apple chips.

In addition to Samsung and TSMC, Apple this year will add Global Foundry and Intel as new chip suppliers as it moves to further diversify its supply chain and reduce reliance on any one supplier, Kuo said.

Kuo expects orders for the A9 processor, which is expected to debut in the iPhone 6s, to be split between Samsung and Global Foundries even though Taipei Times said that TSMC, not Samsung, will remain the sole supplier for the upcoming processor.

Be that as it may, Kuo is adamant that Samsung will be building A9X chips for this year’s iPad models and all of the S1 processors for the Apple Watch.

In 2016, the vast majority of A10 chips for the iPhone 7, S2 chips for the Apple Watch and A10X processors for 2016 iPads and new ARM-powered Macs will be built by TSMC, the analyst projected.

Kuo isn’t always right though his predictions have certainly proved more accurate than those by other (clueless) Apple analyst. Yesterday, for example, he predicted Apple would shun Intel for its own in-house designed A-series processors in new Macs within 1-2 years.